The Government on Wed 1.5.2013, released for public consultation draft Tax Laws Amendment (Sustaining the Superannuation Contribution Concession) Bill 2013 and draft Superannuation (Sustaining the Superannuation Contribution Concession) Imposition Bill 2013.
They propose to reduce the tax concession that individuals with income above $300,000 receive on their concessional superannuation contributions from 30% to 15% by imposing the tax under Div 293 of the ITAA 1997. This was announced in the 2012-13 Federal Budget.
Superannuation contributions that are potentially affected are concessional contributions to interests other than defined benefit interests and defined benefit contributions for defined benefit interests, other than contributions that are subject to excess contributions tax. Certain contributions to interests in constitutionally protected funds, including employer contributions and defined benefit contributions, would also be potentially impacted by the change. Special rules would apply to Commonwealth judges and justices, and certain State higher level office holders.
PROPOSED DATE OF EFFECT: The amendments would apply in relation to affected contributions made or received on or after 1 July 2012.
COMMENTS are due by 8 May 2013.
[FJM Note: This draft legislation is long and complex, but at its heart it imposes a 15% tax on a superannuation fund member, who has more than $300k in “income for surcharge purposes” (taxable income plus most reportable fringe benefits and negative gearing added back) plus superannuation contributions made for their benefit. This extra 15% tax is imposed under Div 293 of the ITAA97. Then Div 135 of the Taxations Administration Act, 1953, Schedule 1, allows the super fund to pay the amount of that tax back out of the fund to the Commissioner or member to pay the tax.]
[LTN 81, 1/5/13]